I think businesses already decide whether to do this or not on a case-by-case basis, depending on whether they anticipate a quick upturn and a need to step up productivity.

The reason they are laying people off is to save money. It costs more to keep them on the payroll at reduced hours than to let them go.

And let's be honest, here. 'Layoff' is another word for 'termination.' Most people who are laid off never get called back, and the companies will tell you outright that you're gone permanently.

The word permanent has been used against companies in court cases. An employee is either temp or regular. Never use permanent postion there is no such thing.

This is something that France tried and unemployment actually increased.

I simply can't see myself being happy if my employer cut my hours because they didn't have the budget to pay everyone.

People have considered this idea off and on in the U.S. over the last 35 years. Some reasons why it's impractical:1. There are fixed costs to having someone on your payroll, whether they are working 30 hours a week or 40. Things like health insurance, office/cube, etc. So if, for example, you reduce everyone's hours by 20%, you save much less than 20% on labor costs.2. A lot of people with for example a 20% reduction in hours and pay, would be in big trouble financially. They would probably have a hard time finding another part-time job to make up the difference.3. If you are laid off, you are eligible for unemployment benefits. You probably wouldn't be if your hours and pay were reduced. 4. As a previous reply said, most companies lay people off permanently when they lay people off. This being the case, temporarily reducing people's hours is not a practical alternative to layoffs. In the few cases where companies need to reduce their workforce for a few weeks, they do furloughs (temporary layoffs).

On the surface, this idea is easily challenged by the cost of having an employee on payroll even if they are not being paid a full wage.

However, why not have companies request funds from government unemployment to keep people working. If the government were to pay the fixed cost for having an employee, the company could keep more employees at reduced wages, and keep these employees from collecting actual unemployement insurance.

The benefits are that the company gets a chance to improve wherever they are lacking without laying of any employees (at first).It is also a bit of writing on the wall for employees that the company is running into difficulty, and though they are not immediately in danger (as the employee will continue to recieve a paycheck), the employee should potentially be prepared to make themselves available for another position (or to be unemployed).

The cost of keeping the employee on part time can be taken out of the employees unemployment 'account'.

The real problem is the system. Employers need to reduce their workforce because sales or services begin to reduce as long as their profits. Stockholders force their managers to to this in order to keep their business profitable. The Economic cycle with "ups and downs" is the driver that fuel the employment capacity, but unfortunately when the economy grows over a 5% a year for several years then there will be a slowdown in the economy because the overall market is unable to absorb it and the people savings has been swiped off. So who is going to demand or buy more products or services?

This has been the same story always. A strange solution has been the "creative destruction" mentioned by Schumpeter, who argue that fi you start with a new product or service by making obsolete an existent one, you recreate the market and fuel again the economic grow.

The solution is a cooperative game...but in a capitalist economy is imposible to implement it.

Eliseo